Add 5 to Y, so the new values are 5, 8, 15, 6, 20. What do you think
will happen to the slope and intercept? (Hint: What happens to
the scatterplot if you add 5 to Y?). Verify your answer by calculation.

(h)

Multiply Y by 5, so the new values are 0, 15, 50, 5, 75. What do you think
will happen to the slope and intercept? (Hint: What happens to
the scatterplot if you multiply Y by 5?). Verify your answer by calculation.

2.

Consider the data in Exercise 1.

(a)

Write down the regression equation for predicting Y from X.

(b)

If a sixth point were found, and this point had value X=4, what is
the regression prediction of the Y-value?

(c)

Compute the Predicted Value for each of the five data points.
Do the Predicted Values have the same average as Y?

(d)

Which of the five Y-values are higher than their Predicted Value?

(e)

Compute the Residual for each of the five data points.
Do the Residuals have 0 average?

(f)

Compute SSE and SSTo. Is SSE smaller than SSTo?

(g)

Compute SSR and R2. How is R2 related to
the correlation between X and Y?

(h)

What percentage of SST0 is 'explained' by X. What percentage
of SSTo is not explained by X?

If a sixth point were found, and this point had value X=4,
the Y-value is predicted to be _________
give or take _________.

4.

Consider the data of a random sample of records of resales of
homes from Feb 15 to Apr 30, 1993 from the files maintained
by the Albuquerque Board of Realtors. This type of data
is collected by multiple listing agencies in many cities
and is used by realtors as an information base.